Premarket: Apple is red

From the Wall Street Journal’s “Stock Futures Waver Amid Rising Covid-19 Cases” posted early Wednesday:

Futures tied to the S&P 500 and the Dow Jones Industrial Average wavered between gains and losses after two straight days of declines. Technology-heavy Nasdaq-100 futures slid 0.3%.

A new wave of Covid-19 infections is sweeping through a number of countries including India and Japan, raising the prospect of fresh hurdles to the anticipated global economic rebound. Health authorities are also warning that new variants may emerge that are resistant to the existing batch of coronavirus vaccines. Given those concerns, investors are putting the brakes to what has been a furious rally in stocks in recent weeks, leaving the major indexes hovering near record highs.

“There are still risks in this market, particularly as it relates to the vaccine rollout and virus mutations,” said Shoqat Bunglawala, head of international multiasset investments at Goldman Sachs Asset Management. “We’re still likely to be in an environment with some volatility.”

Investors are also closely monitoring corporate earnings to see if the current valuations of expensive stocks can be justified. Verizon Communications and NextEra Energy are among a string of companies scheduled to report quarterly results before the market opens. Chipotle Mexican Grill will post earnings after the New York closing bell.

“We expect earnings to surprise on the upside, but the risks are asymmetric. In an environment where markets are at record highs, any company that doesn’t deliver is really punished,” said Luca Paolini, chief strategist at Pictet Asset Management. “Over the next few months the direction of earnings will determine the direction of the market.”

My take: The Street undervalues Apple’s M1 chip at its own asymmetric risk.

6 Comments

  1. Romeo A Esparrago Jr said:
    Speaking of the color red,
    a couple we’re friends with texted that she warned her husband “don’t get any ideas” when they watched the candy colored iMacs get presented in yesterday’s Spring Loaded Event.

    Needless to say, the argument evolved to what color to buy instead of not buying.

    LOL

    15
    April 21, 2021
  2. Jerry Doyle said:
    It’s becoming more evident that we are in a new normal for at least into 2023. I read yesterday where the CDC soon will come forth (as will other countries) with a limitation on international travel for up to 80 percent of countries. We now are seeing more health officials confirming new waves of COVID virus variants and saying these variants will continue to spread among the world populous. Booster shots are needed in this environment but up to half the populous are unvaccinated. This most likely continues with evidence of counterfeit vaccines being used. Medical officials in the US say there is no herd immunity for the country. As bleak & dispiriting as that forecast poses, Apple could not be better positioned with its new M1 chip & new hardware, Air Tags, Podcast subscription service to enhance its current offerings to ameliorate matters as the world populous adapts to WFA & LDL. The new Mac line of cameras with 1080p FaceTime HD doubling the resolution for higher-quality video calls with the larger sensor capturing more light & advanced image signal processor (ISP) of the M1 will become a demand product for collaborating with friends, family and coworkers. Apple will be a $200 stock price at the Q1 2022 earnings call.

    0
    April 21, 2021
  3. Steven Philips said:
    How long ’till the “Product Red” iPad and iMac? It would be a stunning iMac!

    3
    April 21, 2021
  4. Michael Goldfeder said:
    @Joseph Bland: spot on comments!

    2
    April 21, 2021

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